2007-08-21 05:53:28 · 4 answers · asked by Rnpare 1 in Business & Finance ➔ Investing
I'd second snwbm's answer.
The biggest downside is investors themselves - not having the patience to stick with the fund through ups and downs, buying and selling at the wrong time, chasing the latest hot fund, listening to the latest advisers, etc.
2007-08-21 08:31:19 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Asking for investment advise from strangers whose qualifications and motives can't be checked is like buying a "high-dividend" fund and thinking it's conservative.
High Dividend Funds for bonds are bonds from companies that are not credit worthy to get lower rates. High dividend stocks are beaten down stocks (in the market) that may have a very good reason for going down.... thus losing value.
Don't take investment advise from strangers, TV, Radio and especially Yahoo Answers.
Having said that.... my 2 cents is;
Learning about "asset allocation".
Check out "Life Style Funds" from companies like T. Rowe Price, Vanguard and Fidelity.
Ultimately you are responsible for the success of your portfolio. Knowledge will help keep you away from some very dangerous suggestions of others.
2007-08-21 06:43:16 · answer #2 · answered by Common Sense 7 · 1⤊ 0⤋
High dividend funds can have assets allocated in potentially volatile areas REITS, Shipping, Financial. I would consider buying safe boring dividend paying companies JNJ, BAC, ITW PCG, MDT, TPP, RSG for example rather than a fund. ITW and JNJ have both raised their dividends each Q for the past 30 years.
Good luck
the funds will often have a price expense ratio which will drag down your return
2007-08-21 07:02:46 · answer #3 · answered by crim 3 · 0⤊ 1⤋
They can go down in value like any other stock fund. Go with a highly reputable company with low fees like Vanguard or Fidelity.
2007-08-21 06:21:29 · answer #4 · answered by snwbm 4 · 2⤊ 0⤋